Right, let’s see who’s been paying attention. What’s the average selling price of a bottle of still wine in the specialist independent trade?
If your answer is £13.71, you’ve either made a very educated guess, or possibly you’re looking at page 27 of our March edition, where we reported that exact number as part of our reader survey coverage. The figure has been steadily rising since 2017, when it stood at £11.62. The average for the off-trade as a whole – which is, as we know, dominated by supermarkets – is just £5.93.
Imagine if we asked those 179 respondents that same question today, based on the trade they’ve done over the past two months. What would their average be now? Below £13, almost certainly. Below £12? Below the £11.62 of three years ago? Below £10?
When the panic buying began in supermarkets, independents found themselves catering for a new kind of customer – one that has been trained to think that decent wine costs £5.93. They’d be lucky to find anything at that price – even the scruffiest bin-end – in a specialist shop. We may think of £9 or £10 as entry-level, but for vast swathes of the wine-drinking public, that’s 50% or 60% more than they’re used to spending.
The big question being asked by all indies right now is just how many of these new customers will stick around once life gets back to some kind of normality. The answer will depend in part on how much value the Tesco, Morrisons and Sainsbury’s refugees have found in the sub-£10 wines they’ve bought from their local merchant.
A number of suppliers are dismayed at the way their independent customers have pandered to the new wave of low spenders. “What about us?” they ask. “Are you going to delist our £15 wines – and risk your reputation as destination retailers – purely to hoover up some short-term volume?”
For many indies, the situation doesn’t have to be quite as polarised as that. This pandemic is giving the trade the opportunity to carry out a unique experiment: to see how much broader its customer base can become if price points start slightly lower than we’re used to. For many, the early results are exciting.
The strategy only really starts to hit problems if the £9 wines are no better than the £6 alternatives in Asda, or if the merchant starts to make reckless decisions about listings further up the quality and price ladder.
These are modern-day wine retailing skills. Specialists have to sell special wines – whatever the price point.